NBA owners seeking competitive balance

NEW YORK — NBA owners apparently weren’t bluffing when they said they wanted competitive balance just as much as a chance to profit.
Though Commissioner David Stern and Deputy Commissioner Adam Silver have insisted throughout the lockout they needed the potential for both in a new collective bargaining agreement, there was often a belief — even from players — that money mattered most.
Yet it was the salary cap system, not the division of revenues, that emerged as the biggest obstacle to a new labor deal in time to save the start of the regular season.
“The numbers are close enough that that wasn’t going to doom the season. The hard salary cap is what’s going to doom the season right now,” players’ attorney Jeffrey Kessler said Monday. “That’s the sticking point, because the numbers are close enough that if there was a fair system, the parties would find a way to get there.”
That’s not what union president Derek Fisher had predicted less than a month earlier.
Talks had broken down after a meeting in September in which players were prepared to make a new economic proposal, but the league said players conditioned it on owners conceding on the salary cap.
It was clear the union believed management was prioritizing the financial picture when Fisher said afterward that “if we can address these economics, we’re not going to lose the season over the system. So that’s something that’s been clear from the beginning and will remain from our perspective.”
The split was never settled, but both sides say they see where compromise could be reached. Players had proposed lowering their guarantee of basketball revenues from 57 percent down to 53, which they said would transfer more than $1 billion to owners over six years. But in doing so, they expected something in return.
“I think where our paths separate is that they believe to the extent they’re willing to make economic concessions that we should be willing to leave the current system largely intact, and our view is that the current system is broken in that 30 teams are not in a position to compete for championships,” Silver said Monday after the league canceled the first two weeks of the regular seas on.
Next week, the sides will use the same federal mediator who tried to resolve the NFL’s labor dispute months before it eventually ended.
George Cohen, director of the Federal Mediation and Conciliation Service, announced Wednesday that he will oversee negotiations starting next Tuesday in New York.
Cohen said he already has been in contact with representatives of both sides “for a number of months.”
“I have participated in separate, informal, off-the-record discussions with the principals representing the NBA and the NBPA concerning the status of their collective bargaining negotiations,” Cohen said in a statement issued by the Washington-based FMCS.
“It is evident that the ongoing dispute will result in a serious impact, not only upon the parties directly involved, but also, of major concern, on interstate commerce — i.e., the employers and working men and women who provide services related to the basketball games, and, more generally, on the economy of every city in which those games are scheduled to be played.”
The league’s view is that teams willing to keep spending above the luxury tax level have an advantage over teams with payroll constraints. And indeed, teams such as the Lakers and Mavericks, who won the last three NBA titles, are annually among the top spenders.
So owners want a system under which teams with means can’t keep blowing off the cap. Their initial proposal was for a hard salary cap like the NFL has, removing the exceptions that NBA teams possess to spend above the cap.
Players rejected that and the league has since focused on strengthening the luxury tax to deter spenders. But players believe it would become so restrictive, saying in some cases the current $1 for every $1 over the threshold penalty would become $6 or higher, that it would act as a hard cap. And the sides are also clashing over the Bird exception, which allows teams to exceed the cap to re-sign their own free agents.
“And we just said ‘Wait a minute, you’re creating a hard system. You’re creating a hard-cap system and we’ve said to you that’s the one thing we don’t want,”’ union executive director Billy Hunter said.
Players fear that a hard cap would eliminate guaranteed contracts for all but the top players. And they disagree that making teams spend equally would determine how well they compete.
“As athletes we don’t believe that competitive balance is completely decided by an economic system or how much payroll exists on one team or another,” Fisher said. “We believe that there are tons of other variables that impact success on the court, so we cannot just address competitive balance through the control or reduction or lower percentage of player salary or a hard tax system t hat essentially prevents most if not all teams into going into the tax. Those things don’t create basketball wins by themselves.”
The system emerged as such a difficult issue that the sides spent all of their last two meetings discussing it, never getting back to the split before Stern’s deadline for canceling games. Soon after came word the unexpected reason for their failure.
“That did surprise me. Both sides said publicly that the holdup is the system. I thought for sure the big deal was the BRI either made us or broke us,” said Anthony Tolliver, the Minnesota Timberwolves’ player representative.
The sides have discussed a 50-50 revenue split, so perhaps settlement on the finances is there. But that won’t be good enough.
“While we understand their position, we understand change is difficult, it makes no sense for us to operate under the current model where taxpayers, especially those taxpayers who are willing to spend $10, $20 (million) and often even more money above the average team in this league has a huge advantage over the other teams,” Silver said.